MACROECONOMIC FACTORS:

Political Factors

Economic Factors

Financial Crisis The worlds financial crisis and economic downswing all adversely affect the Philippine Economy. Consumers of toothpaste become price sensitive causing them to buy imported brands that are much cheaper than the local brand. Inflation Rate A extensive and exagerated rise or fall in the price of commodities. It is relatively low compared to the previous years. Tariff - Through 2003, all toothpaste imports to and exports from the Philippines were subject to a 10% tariff. Multinational firms had historically avoided such tariffs by manufacturing products locally. By 2004, however, the Asian Fee Trade Association (AFTA) would be established and trade between Philippines and other ASEAN countries in certain products including toothpaste would become tariff free. By 2008, the free trade would be extended globally under World Trade Organization (WTO) agreements. Increase in Unemployment Rate There is high unemployment rate which is about 6.8% from 6.4% last year which indicates the decrease in Filipino income. But since toothpaste becomes a necessity and a daily routine for the Filipinos, toothpaste industry will not be affected much.

Social Factors

Rock Salt - In many of the rural islands, the use of rock salt as a mouth rinse was still a popular alternative to toothpaste. Colonial Mentality - after 100 years of Spanish colonization, the Philippines still has this colonial mentality. The majority of the public still believes that anything produced outside of the Philippines is better, even in the toothpaste industry. There is a hard time introducing a local products not until it has a good partnership internationally.

Flavourings and Colours Filipino is always after the looks and flavours of the products. They always want to have a cool, menthol, and spicy taste in terms of toothpaste flavours for them to feel the freshness and cleanness of their breath.

Technological Factors The highly automated production line would clean, fill, heat, seal, trim and box the tubes, and production workers would then package and seal 4 to 6 boxes together.

Legal Factors

The process of introducing a new product involved determining the market size, developing the product, selecting a brand name, and label design, registering with the Food and Drug Administration (FDA), testing of the product and getting consumer feedback. After the 8 months required for FDA approval, the remainder of the launch took an additional 8 months, when developing a new product the sales dept first evaluated distribution. Smugglers of China made Colgate which is sold at a price in level of some local toothpaste brands such as Hapee, will be a great burden to toothpaste industry.

Environmental Factors